UK Government Orders Banks to Stop Blocking Crypto Companies
📋 Key Takeaways (TL;DR)
- The UK government demands banks treat fairly the 59 crypto companies registered with the FCA
- 80% of exchanges report a rise in banking blocks in 2025
- One exchange reports $1.4 billion in rejected transactions over the year
- The complete regulatory framework is set to take effect by October 2027
- Coinbase CEO describes crypto as an “existential” threat to traditional banks
The United Kingdom has just sent a clear message to its banking sector: stop blocking legitimate crypto companies. This stance comes as the country seeks to become a global hub for digital assets. But on the ground, the reality is quite different.
The UK Government Raises Its Voice
HM Treasury, the UK’s finance ministry, has published an unambiguous statement. Banks must treat fairly all businesses, including those in the crypto sector. The message is particularly directed at the 59 companies registered with the Financial Conduct Authority (FCA), the UK’s financial regulator.
“We do not expect these licensed businesses to be subject to account or transaction restrictions by banking service providers,” a Treasury spokesperson clarified. This statement marks a turning point. It responds to accusations made by Coinbase and the UK Cryptoasset Business Council.
The government also confirmed that crypto legislation has been presented to Parliament. Final rules should be confirmed this year. The stated goal: give crypto companies the certainty they need to invest and grow in the UK.
Alarming Debanking Statistics
A report from the UK Cryptoasset Business Council reveals the scale of the problem. Of the 10 largest exchanges operating in the UK, seven perceive increased hostility from domestic banks. The other three believe the situation hasn’t changed.
The numbers speak for themselves:
- 80% of exchanges report an increase in bank transfer blocks in 2025
- 70% describe the banking environment as more hostile than a year ago
- 40% of transactions are blocked or delayed
- One exchange reports $1.4 billion in rejected transactions in 2025
“If we are registered with the FCA, it shouldn’t be this difficult for UK businesses,” laments an exchange executive. “As a result, we have prioritized other markets.”
Major UK Banks Maintain Restrictions
Among the country’s largest banks, HSBC, Barclays, and NatWest impose limits on the amounts their customers can transfer to crypto exchanges. Others go further. Chase UK, Metro Bank, TSB, and Starling Bank completely block such transfers.
Starling Bank justifies its position on customer protection grounds. “Starling does not allow its customers to buy or sell cryptocurrency by debit card or bank transfer,” a spokesperson explains. “We have taken this decision to help protect our customers.”
UK Finance, which represents over 300 banks and financial service providers, takes a more nuanced stance. The organization says it supports the FCA’s regulatory work. However, it emphasizes that individual banks have “a duty to protect their customers and make decisions based on fraud and economic crime risks.”
Is Crypto an “Existential” Threat to Banks?
The context illuminates these tensions. Brian Armstrong, CEO of Coinbase, recently shared a surprising revelation. At the World Economic Forum in Davos, an executive from one of the world’s 10 largest banks allegedly told him that crypto is now their “number one priority.” And that they view it as “existential.”
This perception partly explains banking hostility. Stablecoins and tokenized assets potentially threaten the traditional banking model. They enable instant value transfers without intermediaries or settlement delays.
Tom Duff Gordon, Coinbase’s head of international policy, criticizes “blanket restrictions that don’t distinguish FCA-registered businesses with low fraud rates from high-risk operators.” He adds: “This isn’t good for consumers, and it undermines the government’s ambition to make the UK a digital finance hub.”
A Regulatory Framework Under Construction
The FCA, long perceived as restrictive toward crypto, is showing signs of opening up. The regulator launched a final consultation last week on new rules. These should come into effect by October 2027.
The “Consumer Duty” will be at the heart of this framework. This rule requires financial firms to act in good faith, avoid foreseeable harm, and help customers achieve their financial goals. Crypto companies will need to provide clear information, fair pricing, and support throughout the customer journey.
The FCA plans to open the crypto authorization application window in September 2026. Treasury legislation, passed in late 2025, extended existing financial rules to the crypto sector. This evolution marks official recognition of the industry.
What Does This Mean for European Investors?
The UK case illustrates a paradox present in several countries. On one hand, governments display crypto ambitions. On the other, traditional banks hinder retail access to exchange services. In France, the European MiCA regulation and the PSAN status provide a clearer framework.
The UK government’s statement could nonetheless set a precedent. It establishes that regulated crypto companies deserve the same banking treatment as other financial players. It remains to be seen whether UK banks will align with this position.
📚 Glossary
- FCA (Financial Conduct Authority): UK financial regulator that oversees financial services firms, including those in the crypto sector
- Debanking: the practice of a bank refusing or restricting banking services to certain businesses or individuals
- Exchange: a platform enabling the buying, selling, and trading of cryptocurrencies
- Stablecoin: a cryptocurrency whose value is pegged to a stable asset, typically the US dollar
- KYC (Know Your Customer): identity verification procedures required of financial firms to combat money laundering
- AML (Anti-Money Laundering): the set of rules and procedures aimed at preventing money laundering
❓ Frequently Asked Questions
Why are UK banks blocking transfers to crypto exchanges?
Banks cite customer protection against cryptocurrency-related fraud and scams. Some analysts also believe they see crypto as a competitive threat to their traditional services. Learn more about crypto risks
What is the FCA register for crypto businesses?
The FCA maintains a register of crypto businesses that comply with anti-money laundering (AML) and counter-terrorism financing rules. This register currently includes 59 companies, including Coinbase, Kraken, and Gemini. Registration guarantees a minimum level of regulatory compliance.
When will full crypto regulation take effect in the UK?
The complete regulatory framework is set to take effect by October 2027. The FCA will open the crypto authorization application window in September 2026. Final consultations are underway with a March 2026 deadline. Learn about the importance of crypto regulation
Are French investors affected by crypto debanking?
In France, the MiCA regulatory framework and PSAN status provide a clearer framework for crypto activities. French banks sometimes impose restrictions, but the phenomenon seems less pronounced than in the UK. Using a PSAN-registered platform remains advisable.
Why would crypto be an “existential” threat to banks?
Stablecoins and asset tokenization enable instant value transfers without going through banks. If these technologies become mainstream, they could significantly reduce banking revenues linked to payments and asset custody. Understanding stablecoins
How does the UK plan to become a global crypto hub?
The UK government is banking on a clear and innovation-friendly regulatory framework. The new legislation aims to give crypto companies the certainty they need to invest in the UK. The requirement for fair banking treatment is part of this strategy.
📚 Sources
This article is based on the following sources:
- CoinDesk – Official HM Treasury statement
- CoinDesk – UK Cryptoasset Business Council report
- CoinDesk – Brian Armstrong statements from Davos
- CoinDesk – FCA Consumer Duty consultation
How to cite this article:
Fibo Crypto. (2026). UK Government Orders Banks to Stop Blocking Crypto Companies. Retrieved from https://fibo-crypto.fr/en/blog/uk-banks-crypto-debanking-fca-government
